EU taxonomy

• Basics
• User group and time of application
• Functional logic
• Link with key financial indicators
• Information on the KPIs
• Recommendations for action & outlook

Different regulations apply in some cases for financial companies. Our sustainability team will be happy to answer any questions you may have.

The TaxVO is one of ten measures in the EU Commission's action plan for financing sustainable growth. Against the backdrop of the Paris Climate Agreement and the adoption of the UN 2030 Agenda (Sustainable Development Goals), the action plan, together with the European Green Deal, aims to radically transform the European financial system. Capital flows are to be channelled into "green" investments for the purpose of a more environmentally friendly and sustainable economy, thereby ensuring the long-term competitiveness of the European economy. A central component of the action plan is the EU taxonomy for categorising sustainable activities in order to create a common understanding of what is considered sustainable.

Together with the new Corporate Sustainability Reporting Directive (CSRD), the EU taxonomy replaces the previous concept for non-financial reporting in the form of the Non-Financial Reporting Directive (NFRD), which was transposed into the German Commercial Code (HGB) by the CSR Directive Implementation Act (CSR-RUG).

Taxonomy came into force directly as a regulation in the EU member states in July 2020. In contrast to the CSRD, this did not require a separate transposition into German law through a national legislative procedure. The CSRD must be transposed into national law by the German legislator by summer 2024 at the latest.

The requirements of the TaxVO require companies to follow a multi-step process. This begins with an analysis of the company's own business activities with regard to compliance with the activities defined as sustainable by the TaxVO and supplementary regulations. Certain information on these activities must then be published. Appropriate data collection structures must be established and maintained for the collection of the required information. These structures can be quite complex, particularly in the case of corporate groups with foreign connections. Companies have to deal with the contents of the EU taxonomy and the underlying delegated acts every year, as the latter are constantly being amended and changes to previous years may arise. The technical implementation of information preparation and disclosure in a separate electronic format (ESEF) will also be new and therefore challenging for many companies.